Monday, March 26, 2012

Housing Reform approved by the Knesset

The Israeli cabinet this past week unanimously approved the housing chapter of the Trajtenberg Report, eight months after the recommendations were submitted. The recommendations seek to respond to demands for affordable housing in last summer's social protest.

The reforms which were passed by the Knesset will basically seek to get more housing stock into the marketplace by doubling the property taxes on a variety of properties that sit vacant for extended periods of time. The social protests of last summer, brought to light the fact that there are a lot of vacant apartments and abandoned buildings in Israel's large cities. Some of these properties are vacant because foreign owners only use the apartments a few weeks per year. These apartments have been referred to as "ghost apartments".

To bring "ghost apartments" on to the market, the property tax ceiling on apartments that stand empty for over six months a year will be doubled. The government estimates that this measure will add to the market 15,000 apartments a year in high demand areas.As for apartments deemed unfit to live in, the exemption on the property will be valid for only nine months, after which the double property tax will be levied on apartments that are not renovated. Hopefully, this will provide some incentive for building and apartment owners to "get busy" with renovations and get the property to market.

Lastly, to prevent contractors who win tenders from delaying in building, a levy of up to 10% of the price of the apartments built will be imposed for not completing construction projects within two years from the receipt of the building permit.

Source Globes

No comments:

Post a Comment